Coronavirus Government Global Briefing: May 26

By Chris Woods

Tuesday May 26, 2020

Welcome to Coronavirus Government Global Briefing, Mandarin Premium’s morning update on everything in local and global government responses to the COVID-19 outbreak.

Morrison to outline vision for economic recovery

Speaking at the National Press Club today, Scott Morrison will outline a vision to reset economic growth over the next three to five years.

According to The Conversation, Morrison will focus today on elements guiding the ‘JobMaker’ plan, which will include an overhaul of skills and training systems as well as industrial relations; other subjects, including tax reform, deregulation, energy, and federation, will be addressed later.

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Changes to skills and training will include:

  • Better linking funding to forward-looking skills that businesses need;
  • Simplifying the system, with greater consistency between jurisdictions and between VET and higher education;
  • Increasing the transparency of funding and the monitoring of performance; and
  • Better coordinating the subsidies, loans and other funding sources to make the most of the support provided.

“Our national hospital agreement provides a good model for the changes we need to make. Incorporating national efficient pricing for training and activity based funding models would be a real step forward,” Morrison says.

As The Australian ($) reports, the national cabinet is expected to establish a uniform price for training costs and target spending on the number of places available according to industry needs.

On the industrial relations end, Morrison will seek a new compact between between workers, employers, unions, and government to boost employment.

Further, Morrison will outline five principles underpinning the plan:

1. Australia will “remain an outward-looking, open and sovereign trading economy” that won’t “retreat into the downward spiral of protectionism” — but also won’t trade away its values for short term gain.

“Caring for country, a principle that Indigenous Australians have practiced for tens of thousands of years”:

“This involves “responsible management and stewardship of what has been left to us to sustainably manage for current and future generations. We must not borrow from future generations what we cannot return to them.

“This is as much true for our environmental, cultural and natural resources as it for our economic and financial ones. Governments must live with their means, to not impose impossible debt burdens on future generations.”

2. Leveraging and building on strengths, including “an educated and highly-skilled workforce that supports not just a thriving and innovative services sector, but a modern and competitive advanced manufacturing sector.”

“Resources and agricultural sectors that can both fuel and feed large global populations, including our own and support vibrant rural and regional communities. A financial system that has proved to be one of the most stable and resilient in the world.

3. “World leading scientists, medical specialists, researchers and technologists. An emerging space sector.”

4. A remix of the “have a go to get a go” line, which includes “access to essential services, incentive for effort and respect for the principles of mutual obligation. All translated into policies that seek not to punish those who have success, but devise ways for others to achieve it.”

5. “Doing what makes the boat go faster”:

“To strengthen and grow our economy, the boats we need to go faster are the hundreds of thousands of small, medium and large businesses that make up our economy and create the value upon which everything else depends.”

On that last point, Morrison will also emphasises reforming the amount of regulation businesses must comply with, and the level and efficiency of the taxes they have to pay — specifically whether these encourage them to invest and employ people.

Germany readies to partially-nationalise local airline Lufthansa

According to AFP, the German government and local airline Lufthansa have announced an in-principle agreement on a bailout plan worth 9 billion euros ($AU15 billion).

Of the 9 billion euros, the package includes a three billion euro state loan to the airline, 5.7 billion of “silent” capital, and a 20% stake in the company for 300 million euros. In the face of a hostile takeover, this could then be increased to “25% plus one share” to give the government a blocking minority; per a sticking point from the company, it will not, however, be enough to establish a majority vote capable of blocking management decisions.

Reportedly, the deal also includes two government-appointed seats on the supervisory board and previously-flagged conditions such as “the waiver of future dividend payments and restrictions on management remuneration.”

What approvals will the plan need?

While the deal would need technical sign-offs from Lufthansa’s supervisory board and the government’s economic stabilisation fund, AFP notes that these are widely seen as a formality.

But there are two genuine, potential barriers, with any deal requiring approval from:

  • shareholders — who would have to agree to any plan that dilutes their investments; and
  • the European Commission’s competition watchdog — which, according to Reuters, is currently in discussions with Lufthansa over which arrival/take-off slots at which airports the airline will have to give up to ensure the bailout does not hamper competition.

According to German publication Handelsblatt (via Reuters), Chancellor Angela Merkel has told senior party members the government will not allow the EC to force Lufthansa to give up valuable slots at Frankfurt and Munich airports.

Elsewhere, Lufthansa’s subsidiaries Brussels Airlines, Austrian Airlines, and Swiss International Air Lines are engaged in bailout talks with their respective capitals, with the latter reportedly set to receive a 1.2 billion euro loan.

News comes a week after China picked up 12.67% of Norwegian Air

Lufthansa’s fate differs significantly from Norwegian Air, another struggling airline that, in order to qualify for a support package from the Norwegian government, was required to reduce its debt.

As Forbes reports, this led to a debt-to-equity swap that turned multiple leasing companies into new owners, including — according to an Oslo Stock Exchange notification — Singapore-based company BOC Aviation as a whopping 12.67% stakeholder.

The move set off a few alarm bells as it ultimately puts the Chinese government as new co-owners:

The notification goes on to explain the ownership chain of BOC Aviation. It is controlled by Sky Splendor Limited, which is in turn controlled by an investment arm of Bank of China. Follow the chain upwards and you reach the government of The People’s Republic of China.

While Norway arguably has a greater responsibility for that consequence than China, a report by Indian global news network WION was quick to frame Germany’s move as means of preventing a similar situation

As journalist Palki Sharma’s accurate — if strongly political — piece points out, Germany already has laws preventing foreign takeovers and their partial-nationalisation plan is distinct in that — as opposed to grants or loans — the new deal allows for a veto on hostile takeover attempts.

It also comes after Merkel pledged both a debt moratorium and maintained aid program for poorer countries throughout the crisis.

Science wrap

  • Scientists at the University of KwaZulu-Natal in South Africa have published a 37-page deconstruction of how one patient presenting with symptoms at St Augustine’s, Durban, created an eight-week-long cluster that infected 39 patients and 80 staff members, with 15 patient deaths.
    • As Science explains, the analysis of how the virus spread from ward to ward and between patients, doctors, and nurses, based on floor maps of the hospital, analyses of staff and patient movements, and viral genomes is the most extensive study of any hospital outbreak so far. It suggests all cases came from that single introduction, and that patients rarely each other; instead, the virus was mostly carried by staff and along the surfaces of medical equipment.
  • As Nature reports, two new studies provide a contrast between the danger of hydroxychloroquineDonald Trump’s drug of choice, but one that suggests an elevated risk of death and abnormal heart rhythms — with the apparent success of remdesivir in shortening recovery times.
  • WIRED has examined some of the latest SMS scams associated with contact-tracing.
  • A report at The Lancet unpacks how PPE shortages, lack of testing, and a vulnerable population led to 20,000 excess deaths across nursing homes in England and Wales.
  • Finally, in a new article at Croakey, respiratory physician, epidemiologist, and public health physician at UNSW Professor Guy Marks has outlined a case for two additional measures that are needed to avoid a second wave of COVID-19
    • payment of a 14-day “COVID-benefit” to all persons who are diagnosed with COVID-19 and all persons who are required, by health authorities, to be quarantined because they have been in contact with a COVID-19 cases, and
    • requiring everyone entering into mass gatherings to show an active COVIDsafe App as a condition of entry (“No App, No Go”).

On the home front: South Australia, Western Australia update recovery plans, Tasmania launches consultation process

Yesterday, the South Australian government announced that pubs, gyms, cinemas, places of worship, beauty salons and other sites can have up to 80 people on their premises from 1 June, as long as they comply with appropriate safeguards. Contact training and non-contact outdoor sport competitions will also be able to re-commence from next Monday, with contact competition launching from June 25.

Similarly, the Western Australian government announced plans to further ease Phase 2 regional travel restrictions on Friday, 29 May. Regional boundaries will be lifted except for regions that are bound by the Commonwealth’s designated biosecurity determination and 274 remote Aboriginal communities.

The WA Police Commissioner and the state government are currently working with the federal government to remove the Commonwealth designated biosecurity areas from Friday, June 5 – around two weeks earlier than the anticipated deadline set by the Federal Government. This means until then, residents will need an exemption to enter the Kimberley region, parts of the East Pilbara and the Shire of Ngaanyatjarraku.

Finally, the Tasmanian government announced that the Premier’s Economic and Social Recovery Advisory Council will undertake a three-stage consultation process as part of their work reporting on the state’s short, medium, longer term social and economic recovery.

This will include initial targeted consultation with Government Agencies, existing recovery networks, and peak bodies as part of Stage One, followed by extended consultation with the Tasmanian community in Stage Two.

“I expect to receive the Council’s Stage One report at the end of June 2020, which will include high level immediate initiatives and responses that we can put in place reasonably quickly, and well before the Budget in November, to ensure our economic and social recovery is progressed swiftly,” Premier Peter Gutwein said.

How to access your jet mid-pandemic? Fly there!

Finally, in what might go down as the most upsetting COVID-era marketing campaign, global aviation company VistaJet has launched a package for the ultra-rich to safely reach yachts without, as Bloomberg puts it, “risking exposure to the germ-ridden masses”:

“Spurred by member demand, clients can reserve a freshly sanitized jet to fly them to a yacht moored in Malta (where, as it happens, VistaJet is based). Lest anyone be worried that the island nation itself is germ-ridden, a press release notes that ‘The World Health Organization singled out Malta as a role model for other countries in the fight against Covid-19.’

The news comes after progressive think tank ‘Americans for Tax Fairness and the Institute for Policy Studies’ found that the total net worth of all American billionaires rose $US434 billion ($AU663 billion) since state lockdowns began on 19 March, because that’s just how that country works.

Source: ‘Tale of two crises: Billionaires gain as workers feel pandemic pain.’

For health department updates: Federal, NSW, Victoria, QueenslandACTSouth AustraliaTasmaniaNorthern Territory and Western Australia.

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